Real Estate Market

Wow, only 7 weeks until spring.  I hope you enjoyed your holiday season.   Now we can set our focus on Valentines Day, St Patrick’s Day, and the eagerly anticipated arrival of warmer weather.  Hopefully, the arrival of spring will be preceded or accompanied by positive news for our local economy and housing market.  We hear and see national real estate reports that “Prices fell, but homes sales rose in 2009”, that the national recession has ended, and that local companies are seeing signs of economic recovery, and are talking of putting people back to work.  This is certainly welcome news.

Through these trying times, one positive note continues to be the great opportunities available for home buyers who are able to enter the market now.  Current buyers are finding an ample supply of nice and affordable homes, interest rates that are still temporarily being held artificially low by government investment in mortgage backed securities, the new home-buyer tax credit that covers many current home owners in addition to first-time home buyers, energy tax credits, and other buyer assistance programs.  As reported by Marc Roth, at BusinessWeek.com, home buyers may never see such a chance again, and “If you don’t buy a house now, you’re stupid or broke”.  Then again, you may already own a house and simply don’t want to move.

According to the National Association of Realtors® (NAR), on the national level, as expected, existing home sales in December fell 16.7% from November, but were still 15% higher than December 2008 sales.  Nationwide, sales activity for all of 2009 was 4.9% higher than 2008, representing the first annual sales gain since 2005.  In the Midwest, existing home sales in December fell 25.8% from November, but were still 8.5% above December 2008 sales.

Historically low interest rates continue to provide a boost to the market.  According to Freddie Mac, this week’s average for 30-year fixed-rate mortgages was 4.98 percent, up from the 4.71 percent reported last month and slightly below the 5.1 percent in January 2009.  The average for 15-year fixed-rate mortgages was 4.39 percent, while 5-year adjustable-rate mortgages (ARMs) dipped to 4.25 percent, and 1-year adjustable rate mortgages decreased to 4.29 percent. 

As always, borrowers with the best credit, verifiable income, and a sizeable down payment (20% or more) will get these best rates.  Buyers with excellent credit but minimal down payment (at least 3.5% for FHA) may qualify for the better rates, or close to it, but will likely have to pay mortgage insurance, increasing the cost of the loan.  Buyers with fair credit can improve their position by increasing their down payment.  If buyers with fair credit and minimal down payment are able to qualify for a mortgage, they can expect interest rate offers to be percentage points above the best rates.  All borrowers must have verification of stated income and/or assets. 

It is important to know that there are plans to terminate the Federal Reserve’s mortgage-backed security program at the end of March.  Why is this such a big deal, and why are the rates currently being offered considered a gift of a lifetime?  When this program ends, and the economy stabilizes, rates will likely climb to 6% in the near future, and probably climb to 7-8% once the economy is going strong again.  Every quarter-point change in interest rates is equivalent to approximately $6,000 for every $100,000 borrowed over the course of a 30-year fixed loan.  If you are planning on buying a home now or in the foreseeable future, or looking to move your family into a bigger home, you should pay more attention to the interest rates than the price of the home.  If you have a steady job, good credit, and the required down payment, you really are being offered the gift of a lifetime, and that’s without taking the tax credit into account.

In addition to low mortgage interest rates, the national median existing-home price for all housing types was $178,300 for December, up 1.5% from December 2008.  For all of 2009, the median price was $173,500, down 12.4 percent from 2008.  Nationwide, distressed home sales (including foreclosed homes or those requiring a lender-mediated short sale, where the seller owes more than the home sells for) at discounted prices (typically 15-20% less than the normal market price), accounted for 32% of sales for December, and 36% of total sales for 2009, and are still holding down average and median home prices.  Traditional (non-distressed) homes in good condition are holding their value much better.  Here in the Midwest, the median price decreased to $143,200 in December, but is still 1.8 percent higher than December 2008.

So, what about Macon County?  According to Decatur Association of Realtors® statistics, the number of REALTOR®-led home sales in December was up significantly (+17.9%) from December 2008 figures.  Average days on market (-5 days) and average sales price % of list price (+.8%) also improved from December 2008.  Unfortunately, average list price (-13.4%) and average sales price (-12.6%) dropped significantly from December 2008.  The local median sale price for December was $74,500, down 2 percent from December 2008. 

So, are we in a seller's or buyer's market here locally?  As we have been for the last year, with few exceptions, we are still in a strong buyer’s market.  However, sellers that are either staying in the local area and moving up in home value, or leaving the local area and moving to an area with higher home prices (very likely), will find equally good deals on their new homes, and still come out ahead in the long run.

Local interest rates are very comparable to national rates.  Once again, our local lenders do have funds available to lend to qualified buyers, although the impact of credit scores and down payments mentioned earlier still applies.  These low interest rates, the availability of mortgages, and the good supply of available and affordable homes continue to make now a great time to buy.  With 664 homes on the market in our area today, there are certainly nice homes available.  For sellers, homes that are placed on the market in selling condition and conservatively priced are selling, and often selling fast. 

With everything that’s happened in the last year relating to real estate practices (the tightening of credit, the elimination of national seller assisted financing programs, the expired first-time-home-buyer tax credit, the new home-buyer tax credit, the creation of an Illinois down payment and closing cost assistance program, home energy efficiency tax credits, etc.), it is essential that prospective home buyers understand their options and opportunities.  Real estate professionals have the knowledge and skills necessary to help determine pricing, timing, and best value, whether you are buying or selling; whether you are a first-time buyer, or a seasoned home-buying and -selling veteran.  

With all of the confusing national real estate news that you see or hear on the TV, on the radio, on-line, or in the newspaper, it is more important than ever to examine and understand what’s happening at the local community and neighborhood level.  As a home buyer or seller, you should check with a REALTOR® for local expertise on what’s going on in your own area because conditions can vary considerably from one neighborhood to the next.  If you would like our team's assistance with the purchase or sale of a property, please give us a call. 

Who do you know that is thinking about moving and could use our services?  Our team of experts would love to help them as well.  It is our pleasure to assist you with your most precious investment.  With the Glenda Williamson team, your satisfaction is our success.

1.  If necessary, hire a cleaning service.  A spotlessly clean home is essential; dirt will turn off a prospect faster than anything.

2.  Pay attention to the outdoors.  Mow your lawn, and be sure toys and yard equipment are put away.  During the winter, make sure the driveway and sidewalks are clear of snow and ice.

3.  For an open house, serve cookies, coffee, and soft drinks.  It creates a welcoming touch. But be sure the kitchen has been cleaned up; use disposable cups so the sink doesn’t fill up.

4.  Lock up your valuables, jewelry, and money.  Although the real estate salesperson will be on site during the open house or showing, it’s impossible to watch everyone all the time.

5.  Turn on all the lights.  Even in the daytime, incandescent lights add sparkle.

6.  Send your pets to a neighbor or take them outside.  If that’s not possible, crate them or confine them to one room (a basement or bath), and let the salesperson know where to find them.

7.  Leave.  It’s awkward for prospective buyers to look in your closets and express their opinions of your home with you there.

Making Your Home Irresistible

1.  Add a touch of color.  Use fresh or silk flowers to breathe life and color into the main rooms.  A colored afghan or throw on the couch will jazz up a dull room.

2.  Make the bathrooms feel luxurious.  Put away those old towels and toothbrushes.  When buyers enter your bathroom, they should feel pampered.  Add a new shower curtain, fresh towels, and fancy guest soaps.

3.  Does it smell good?  Set out potpourri or fresh baked goods for a homey smell.  Make sure that there are no lingering scents from cigarettes or pets.

4.  Help them envision living there.  Set the table with pretty dishes and candles, and create other vignettes throughout the home to help buyers picture themselves there.  For example, in the basement lay out a chess game.

5.  Beautify the entrance.  Buy a fresh doormat with a pretty pattern or a clever saying.

6.  Make the rooms feel bigger.  Take one or two major pieces of furniture out of every room to create a sense of spaciousness.

7.  Accentuate counter space.  Put away kitchen appliances and personal bathroom items to give the illusion of more counter space.

8.  Lay logs in the fireplace.  Or put a basket of flowers there if it’s not in use.

9.  Depersonalize the rooms.  Put away family photos, mementos, and distinctive artwork.

10. The lawn should sparkle.  During warmer months, if available, turn on the sprinklers for 30 minutes to make the lawn sparkle.

Be sure that:

• The repairs you’ve requested have been made. Obtain copies of paid bills and any related warranties.
• All items that were included in the sale price—draperies, lighting fixtures, etc—are still there.
• All screens and storm windows are in place or stored.
• All appliances are operating.
• The doorbell, and alarm and intercom (if present) are operational.
• The hot water heater is working.
• The furnace and A/C is working.
• No plants or shrubs (or lawn ornaments on the contract) have been removed from the yard.
• All garage door opener and other remotes (ceiling fans, fireplaces, etc) are available.
• The user manuals and transferrable warranty documents for all appliances and fixtures are there.
• All personal items of the sellers and all debris have been removed.

Words of Wisdom!

Do enjoy the following:

•  “My son, observe the postage stamp!...  Its usefulness depends upon its ability to stick to one thing until it gets there.” - Henry Wheeler Shaw
• “The best helping hand that you will ever receive…is the one at the end of your own arm” - Fred Dehner
•   “I am convinced that one of the biggest factors in success… is the courage to undertake something.” - James A. Worsham
•  “You can either take action…or you can hang back and hope for a miracle!  Miracles are great…but they are so unpredictable.” - Peter Drucker
• “Extraordinary people visualize not what is possible or probable, but rather what is impossible…and by visualizing the impossible they begin to see it as possible.” - Cherie Carter-Scott
• “Set your sights high…the higher the better.  Expect the most wonderful things to happen…not in the future…but right now.  Realize that nothing is too good.” - Eileen Caddy
• “The best leaders are very often the best listeners…They have an open mind.  They are not interested in having their own way…but in finding the best way.” - Wilfred Peterson

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